New business investment figures back Treasurer Scott Morrison’s view the economy is “shifting gears” and entering a new chapter of growth.
Business capital expenditure rose by a further one per cent in the September quarter and spending plans were upgraded.
Annual investment grew by 2.3 per cent, the first positive result since late 2012.
“Today’s capex result was unquestionably strong,” Commonwealth Bank economist Kristina Clifton said.
Mr Morrison told a business dinner the downturn in mining investment that restrained the economy for many years had all but run its course.
“Our economy is strengthening and will continue to strengthen with the right policy settings in place,” he told the Australian Chamber of Commerce and Industry on Wednesday.
Thursday’s data feeds into economic growth figures due on December 6.
At this stage the forecasts of economists range from 0.5 to 0.8 per cent growth in the quarter.
That would lift the annual rate to around a much stronger than of late three per cent and a figure more in line with sustained employment growth.
Economists will refine their predictions after data for company profits, trade and government expenditure are released early next week.
Treasury will use the national accounts to update its own forecasts for Mr Morrison’s mid-year budget review, which is due to be handed down in mid-December.
Other figures on Thursday showed building approvals rose 0.9 per cent in October, buoyed by a 24.3 per cent surge in approvals in Victoria.
Housing Industry Association senior economist Shane Garrett described the Victorian result as “remarkable” and outstripped the declines in all other states, bar Queensland which rose by 6.1 per cent.
“Strong employment growth in Victoria is attracting interstate and international migration and the rising population is continuing to drive demand for more housing stock,” Mr Garrett said.
However, separate data showed demand for housing credit is showing signs of easing annually as macro-prudential measures implemented by Australia’s financial regulators to cool the housing market are complied with.